Fugro has announced that it is implementing a cost and capex reduction programme to mitigate the impact of the COVID-19 pandemic and low oil prices.
In a statement, Fugro said: “Despite strong efforts to keep operations going, some projects cannot be executed as originally planned due to increasing travel restrictions and country lockdowns, which are impacting the business, particularly in the Europe-Africa region. The impact of the virus is compounded by oil and gas companies’ recently announced spending cuts due to the sharp decline in the oil price.”
Fugro announced immediate action to mitigate the impact of the above factors on its business. The company is implementing a programme to significantly reduce costs and capital expenditure, with the aim of realising cash savings. This includes minimising the hire of short-term charters, implementing a hiring and salary freeze and measures to reduce our workforce.
"These are painful measures that are necessary as a result of the dual impact of the COVID-19 pandemic and the low oil price environment. Furthermore, we are assessing all available possibilities for government support to bridge this difficult period. Current liquidity is good with over EUR 400 million available in cash and committed facilities."
Mark Heine, CEO, commented: “Our priorities in this complex environment are clear: preserve the health and wellbeing of our people and those of other stakeholders, ensure business continuity and reduce costs and capex in order to protect liquidity and profitability. We have a strong and committed team in place that is dealing with this unprecedented situation. I am impressed by the professional behaviour and dedication of all our colleagues, especially those who work in the field or onboard one of our vessels. Although our backlog is still solid, our business operations will be impacted, especially given the combination of the pandemic with the recent sharp decline in the oil price. We are continuously analysing scenarios and are implementing mitigating measures.”